Trumpcare Proves That Conservatives Would Rather Increase Inequality Than Create Jobs

Share

The American worker has no better friend than Grover Norquist. Or so the anti-tax zealot would like you to believe.

Over the weekend, word leaked that White House chief strategist Steve Bannon was pushing for the president to raise taxes on the rich — a politically sound proposition that would also eliminate the Republican Party’s reason for being.

“It’s a particularly cruel thing for Bannon to do,” Norquist told CNN on Monday. Of course, Norquist was not concerned about how a tax hike would affect the finances of his family, or the bank accounts of those who write his paychecks. Rather, the arch-libertarian was outraged on behalf of the “12 million Americans” who would have been employed today, were it not for Barack Obama’s irrational opposition to cutting taxes on the rich.

Taking money from millionaires may satisfy some retrograde intuitions about economic justice, Norquist allowed, but maximizing Americans’ employment prospects must take precedence: “High tax rates on the highest income people are the excuse they use to damage the middle class.”

Norquist is far from the only conservative who demands progressives subordinate their obsession with equality to the goal of job creation. After all, the notion that a strong safety net and robust labor protections are incompatible with low unemployment and high economic growth is the central premise of the GOP’s economic pitch.

The Democratic Party’s vow to guarantee that no full-time worker lives in poverty might sound nice, in the abstract. But trying to mandate that outcome through a minimum wage could reduce employment opportunities for low-income laborers — and that prospect is simply unacceptable to Republican lawmakers. Similarly, one might think prohibiting coal companies from dumping mining waste in streams would be in the public interest, but the coal industry employs 76,000 Americans — almost as many as Arby’s does — and the costs of regulatory compliance could cost some small fraction of those workers their livelihoods. And that just can’t be tolerated, conservatives reason: In his speech explaining why the United States had to undermine global cooperation on climate change, President Trump said the word jobs16 times.

There are a lot of reasons to believe conservatives’ commitment to full employment is wholly disingenuous. For one, there is little-to-no evidence that raising taxes on the rich — or increasing environmental regulation — produces inevitable disemployment effects. For another, the same Wall Street Journal op-ed page that frets about how higher minimum wages would hurt so-called low-skill workers simultaneously demands the Federal Reserve deliberately increase unemployment so as to preempt the possibility of even moderate inflation.

But the biggest tell may be how comfortable conservatives are with increasing unemployment and slowing economic growth, when their intuitions about redistributive justice demand such a sacrifice.

Obamacare’s Medicaid expansion is a prime example. Studies have routinely demonstrated that the program is one of the most effective job-creation measures in recent history. The University of Michigan has found that the state’s expansion of Medicaid will increase personal income there by $2.3 to $2.4 billion every year from 2017 to 2021 — generating between 30,000 and 38,000 new jobs, annually, in the process.

Researchers at Colorado State University, meanwhile, project that that state’s participation in the Medicaid expansion will add an extra $4 billion to its GDP, and 30,000 workers to its labor force, every year between now and 2021. As Vice notes, recent analyses of the program’s likely effects in New Mexico, Alaska, Arkansas, and Kentucky have all reached similar conclusions.

A recent analysis by George Washington University estimated that such a policy would cost the 31 expansion states and D.C. 1.2 million jobs — and $200 billion in lost business output — by 2019.

Conservatives might counter that not all jobs are created equal, and positions that owe their existence to government spending are inherently invaluable.

That second point will enjoy little buy-in among those who don’t worship at Ayn Rand’s altar. Ask the American public which worker is more valuable — a nursing home attendant whose salary is subsidized by Medicaid, or a hedge-fund manager who draws a seven-figure private-sector salary while consistently failing to beat the market — and you’re unlikely to find all that many votes for the latter.

But the first point holds. All jobs aren’t equally worth creating: Subsidizing the consumption of health care is especially good for stimulating local economic growth. The reason for this is simple. When working-class people spend more money on televisions and computers, a hefty portion of that spending gets diverted away from the local community and toward far-flung corporate centers. In fact, if consumers make their purchases online, almost none of their spending helps stimulate their local economy.

But when a lower-middle-class person uses Medicaid to purchase medical services, her money goes into the coffers of a local hospital and the pockets of local health professionals. That hospital is then in a better position to expand its hiring, while those doctors, nurses, administrators, and other medical professionals can spend more money at local businesses.

Grover Norquist and his ilk believe that it is morally wrong for the government to tax the capital gains of the wealthy and invest that revenue into subsidizing health insurance for poor and working people. And they are willing to sacrifice hundreds of thousands of jobs to honor that moral principle.

Conservatives are entitled to that (deeply unpopular) worldview. But the next time Norquist or Avik Roy laments the disemployment effects of progressive policy goals, let’s not presume that they’re concerned with protecting anyone’s job or income but their own.